This document discusses key concepts in product management, including the different dimensions of a product, product classifications, and the new product development process. It describes the core product as what consumers really want from a product, the tangible product as the product itself, the augmented product as accompanying services, and the promised product as the status the product provides. It also outlines the typical eight-step new product development process that many new products fail to follow successfully. Overall, the document emphasizes that successful product management requires understanding consumer behavior and that the "product" encompasses more than just the physical item.

1. © 2004 Mark H. Hansen
PRODUCTPRODUCT
MANAGEMENTMANAGEMENT

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Dimensions of a Product:
• Core Product
• Tangible Product
• Augmented Product
• Promised Product

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Core Product:
• what the consumer really wants
from the product
• buys bran cereal for family…
…wants healthy family
• it’s not the product itself, it’s what the
product can bring about

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Tangible Product:
• the product itself
• appearance
• quality
• functionality

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Augmented Product:
• the product plus accompanying services
• service/maintenance
• buying environment
• warranties & return policies

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Promised Product:
• status the product will bestow
• dependability
• trade-in value
• any aspect of the product that helps
bring about the core product

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Product dimensions vary from consumer
to consumer
• core and promised dimensions may be
very individual in nature
• different people buy the same
product for different reasons
• marketers need to understand
consumer behavior

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Product Classifications
• convenience goods
• shopping goods
• specialty goods

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Goods Products and Services Products
• goods are tangible, traditional products
• services are intangible
• simultaneous production & consumption
• difficult to evaluate
• relationships matter more

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Product Strategy Formulation
Product Objectives
• Why have this product?
• growth
• using excess capacity
• market share
• target new segments

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Product Strategy Formulation
Product Plan
Product Lifecycle - Five Stages
1 – Product Development
2 - Introduction
3 - Growth
4 - Maturity
5 – Decline

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Product Strategy Formulation
Product Strategies
Approaches to the Market
• product differentiation
- customers see a difference
• market extension
- new uses for the product – Scotch tape
• market segmentation
- develop new products for new segments

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Product Strategy Formulation
Key Management Decisions
• product features
• packaging
• branding
• related services
• product mix
• product line decisions
• product deletion

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“New” Products
How new is new?
• FTC – functionally significant or
substantial respect

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“New” Products
Where do they come from?
Internal Sources:
• basic research
• applied research
• development

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“New” Products
External Sources
• mergers & acquisitions
• licenses & patents
• joint ventures

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New Product Development Process
• many, if not most, new products fail – Why?
8 Step Process
1 – generating new ideas
2 – screening new ideas
3 – business analysis

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New Product Development Process
4 – technical and marketing development
5 – manufacturing planning
6 – marketing planning
7 – test marketing
product testing v. test marketing
8 - commercialization

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Summary…
• successful product management depends
on understanding consumer behavior
• the “product” is multifaceted, much more
than the physical product itself
• managing the ‘stable’ of products is no
simple task